Australian Dollar Hit By J.P. Morgan Losses

The impact of JPMorgan’s announcement that it has taken $2 billion in trading losses over the past six weeks seems to have run its course in the market with the Australian dollar bearing the brunt of increased selling-pressure, says Masafumi Yamamoto, chief forex strategist at Barclays Capital in Tokyo.

“I can’t say whether the AUD will be sold any further, but with Chinese indicators coming up, selling seems to have calmed down for now,” he says.

JPM revealed that it could take an additional $1 billion in second-quarter losses due to big bets on derivatives gone wrong. Kengo Suzuki, forex strategist at Mizuho Securities, says the house’s losses aren’t likely to trigger larger-scale financial instability, but could weigh on U.S. stocks later.

“The impact of the news may be limited if these are stand-alone losses,” he says. The AUD/USD is at 1.0062 from and earlier high of 1.0086.

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